15 January 2024 , 10:51
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PageGroup, a recruitment firm, has warned about a decrease in profits and revealed that jobs would be cut due to a slower job market.
The company reported that in the last three months of 2023, it removed 224 roles which brought in fees, an approximate 3.7% reduction, along with cutting 57 back office positions across all global areas.
The recruiter now predicts end-of-year earnings to fall slightly below the previously guided £120 million to £125 million range.
Like its competitors Hays and Robert Walters, PageGroup pointed out weaker confidence among businesses and job candidates regarding new positions, particularly towards the end of last year.
For the final quarter of 2023, the company's gross profits fell by 8.9% to £237.3 million, stating year-end salary reviews and bonuses amplified uncertainties and posed challenges during this period.
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With gross profits plummeting 19.9%, the UK was their worst-performing region, although Europe also saw weakening conditions.
PageGroup asserted that wage growth is starting to retreat, saying "offers made to candidates are not as elevated as they were in 2022".
Chief Executive Nicholas Kirk shared: "Despite the year-on-year decline in gross profit, we are still seeing good activity levels, albeit we did see a deterioration in job flow through the fourth quarter."
"However, these activity levels are not all converting into gross profit due to ongoing lower levels of candidate and client confidence."
He said the group's costs are "under continuous review and can be adjusted rapidly to match market conditions".
Last week, Hays and Robert Walters both said they were cutting roles as job markets weakened, with Hays warning that profits would be lower than forecast and expectations for trading to remain challenging.
PageGroup said that in the UK, which accounts for 12% of group fee income, its workforce fell by 79 to 1,164 during the fourth quarter.
"We continued to see clients deferring hiring decisions and candidates becoming increasingly cautious about accepting offers," it said.
In the UK, gross profits tumbled 23% across Michael Page and were 15% lower at Page Personnel.
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